— This is the script of CNBC's news report for China's CCTV on March 23, 2020, Monday.
The lack of votes for a third stimulus package in the US senate on Sunday night further undermined confidence in financial markets that had been waiting for more stimulus.
We've seen U.S. stock futures down 5%, hitting the downside limit, international oil prices decreased further,WTI oil prices declined more than 8%, both parties agree on the need for more stimulus, but the details remain divided.
executive vice president and head of International Affairs the U.S. Chamber of Commerce
I think that both the house republicans and democrats in the Senate, the republicans and democrats, understand that no family and no business should go bankrupt during this Pandemic and so the efforts are under way. I think we will reach a successful conclusion. But there is obviously some negotiation going on, regards the drug payment and the size of the loans are going to be available to businesses, small businesses and larger businesses. And so the final shape of the package is coming into, I think, clarity. But they are still negotiating on some elements of the package that everyone agrees. We need a massive stimulus. That's what we need right now. We need an adjunction of liquidity and we need some confidence in the system.
And the U.S. economy will continue to bear the brunt of coronavirus until more stimulus packages are formally unveiled and implemented, Goldman Sachs further slashing its forecast for U.S. growth in a report on Friday.
America's GDP is forecast to fall by 6% in the first quarter and by 24% in the second, almost five times as much as the previous forecast and if true, that will rewrite the record for quarterly GDP declines in America, whose biggest quarterly drop was 10% in the first quarter of 1958.
Goldman Sachs also predicted that the U.S. unemployment rate could rise to 9% in the second quarter, though St. Louis fed President James Bullard gave a more pessimistic forecast, saying it could surge to 30% in the coming months.
Before unemployment data, one key number the market is paying close attention to is weekly initial claims for unemployment benefits, the labor department reported Thursday that the number jumped to 281,000 from 212,000 a week earlier. And the Bank of America and Goldman Sachs predict that the data will be released on this Thursday can reach 2 to 3 million people, which is likely to hit record levels.
U.S. Treasury secretary Steven Mnuchin said on Sunday that the government's economic stimulus measures will exceed $2 trillion, and markets believe they will eventually expand this scale, leading to an explosive increase in the U.S. budget deficit.
Mnuchin has said that the top priority is helping small businesses. But McDonald's CEO tells us that for small businesses around the world, the key is to fight the coronavirus.
MC DONALD CEO
I would say the number one thing that we need from governments, not just in the US but around the world right now, is let's stop this pandemic. And I think once we do that, the sooner we can do that, we can talk about everything else. But job one right now is to stop the pandemic.
Several US states have announced closures, following New York and California. Financial markets will also continue to watch for more government action while waiting for a stimulus package. We will keep an eye on this issue.